YOUNKERS MEETING ADJOURNED UNTIL JUNE, PENDING PROXY VOTE

Byline: Valerie Seckler

NEW YORK--Younkers adjourned its annual meeting Wednesday until June 2, pending a certified tally of votes on Carson Pirie Scott's proposals to auction Younkers to the highest bidder and place three nominees on Younkers's board.
Commenting on the outlook for the proxy battle, Thomas Gould, chairman and chief executive officer of Younkers, said, "Based on the information available to us, substantially less than a majority of the outstanding shares voted to put Younkers up for auction."
However, Edward Carroll Jr., an executive vice president at Carson's, said, "We are optimistic that our resolutions have passed."
The auction attempt is part of Carson's two-pronged strategy to take over the 53-unit Younkers department store chain based in Des Moines, Iowa.
If Carson's $19-per-share cash tender offer for Younkers falls short, but its board nominees are elected, it will seek to auction off Younkers.
Younkers strongly opposes Carson's takeover effort, making the election of Carson's slate essential for it to put Younkers at auction.
Nevertheless, the proxy vote on the auction is non-binding because Carson's three nominees would not form a majority on Younkers' nine-person board, Carroll noted. If elected, Carson's slate would pressure Younkers to auction off the company.
Carson's said it hasn't decided whether to extend its tender offer, which expires Friday. Sources said Wednesday that an extension was likely in light of the two weeks it will take to certify the proxy vote.
As of May 3, Younkers shareholders tendered 31.4 percent of Younkers common stock. Carson's owns another 11.7 percent.
Separately, Carson's said that soft sales of women's apparel, heavy promotions and renovation costs drove down its earnings before interest, taxes, depreciation and amortization by 18.6 percent in the first quarter.
EBITDA skidded to $9.2 million in the quarter ended April 29, from $11.3 million a year ago, however, Carroll said, "Our biggest disappointment in a disappointing quarter was the top line. The degree of sluggishness wasn't anticipated."
Overall sales fell 2.6 percent to $249.4 million from $256 million but comparable-store sales grew 3.6 percent.
A one-time gain of $55 million on selling eight stores to Mervyn's in March boosted net income to $34.4 million or $1.84 per share, from $2.8 million or 14 cents. Excluding the gain, Carson's net dove 50 percent to 7 cents per share.--Fairchild News Service

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